Chinese tablet makers flood market with cheap, crappy models

by vent wing

New research out today shows that tablet computer sales are up, driven in part by a proliferation of Chinese brands of Android tablets selling for $100 or less.

A report from the research firm IHS Inc. shows that just over 48 million tablets were sold worldwide in the third quarter of 2013, a 10 percent increase from the second quarter. While Apple retained its number one sales ranking with 14.24 million iPad and iPad Mini units shipped, competitors chipped away at Apple’s market share, reducing it to 29.7 percent in the third quarter from 33.5 percent in the second.

IHS attributes the change to a surge in the number of tablets from Chinese and other Asian tablet makers, all using the Google Android mobile operating system, the chief rival to Apple’s iOS.

Established players such as South Korean Samsung and Chinese brands Asus and Lenovo have sold the most Android tablets of late, but IHS sees something else happening.

“Much of the heavy lifting has been done by little-known, regional vendors based in China that have blanketed the globe with minimally configured, Android-based, 7.x-inch tablets at price points of $100 or less,” IHS stated in a news release. A tablet with a 7-inch diagonal screen is considered a “mini” tablet; full-sized ones have about a 10-inch screen.

“The growth in cheaply made, inexpensive Android tablets is a key piece of the growing imbalance between shipments and usage measurements in the tablet world,” Rhoda Alexander, director of tablet research for IHS, explained. “The cheaper tablets tend to have much higher return and failure rates. This results in much shorter overall product lifetimes in the Android market than in the iOS space.”

As a result, Alexander continued, Android tablets may enjoy higher sales volumes than iPads, but Apple still has a larger installed base because its products are more reliable than some of the entry-level Androids.

The size of the installed base is important because it is a key metric for content and application developers, she said.

The impact of China on the tablet market is of a piece with its growing influence in the market for smartphones, which I reported on yesterday. Another research firm, IDC, reported October 29 that Chinese-made smartphone sales were the fastest growing brands in the market, with Huawei’s sales rising by 75.6 percent and Lenovo’s sales jumping by 7.14 percent in the third quarter. IDC also noted that other Chinese brands, such as Coolpad and ZTE, while not making the top five vendor list, made notable gains, too.

When the fourth quarter 2013 tablet sales numbers come out early next year, we’ll be looking for the impact on Apple of sales of the new iPad Air and iPad Mini, which were introduced Oct. 22 and will go on sale in November.

They will be priced starting at $499 (US) for the iPad Air and $399 for the new Mini, which means they won’t be able to compete against the sub-$100 tablet market in China, but should be able to shore up Apple’s tablet market share among its most loyal customers.